The South African Rand has made gains against Sterling and strengthened against a number of its most traded peers after data out of the world’s second largest economy, China met economist expectations.
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 14.9280
In the second quarter of 2013 the Chinese economy grew by 7.5%, slightly down on the previous quarter’s figure of a 7.7% rise. The data is positive for South Africa which depends on exporting raw materials to its largest buyer. The export of metals such as platinum and chrome makes up more than 50% of the nation’s total export earnings.
Boosting the Rand was the rise in the value of commodities such as Gold. South Africa is the world’s fifth biggest export of the metal and platinum increased in value for a sixth consecutive day, marking its longest series of gains since January.
“The market is relieved that this morning’s figure wasn’t worse. China’s slowdown is a major worry for commodities and therefore for South Africa and the Rand” said John Cairns, a currency strategist at Rand Merchant Bank.
The Rand is now likely to hold steady against the US Dollar until at least Thursday when the South African Central Bank announces its latest interest rate decision. The Reserve Bank is expected to maintain interest rates at its current level of 5% on July 18th. Thursday looks set to be a significant day for volatility in the South African currency as on the same day US Federal Reserve Chairman Ben Bernanke is expected to shed further light on the tapering of the Central Bank’s monetary stimulus programme.
Any slowdown in the Feds bond buying scheme and a strengthening in the US Dollar is likely to weigh upon the Rand.
“The Rand looks stuck within a R9.85 to R10.30 per $ range for the time being. With the Fed likely to start normalizing policy towards the end of the quarter, with an associated expected slowing in capital inflows towards emerging markets, the risk lies in the local unit rising back to the top of this range, possibly as high as R10.50 over the coming months” said Absa Capital in a note.
Current South African (ZAR) Exchange Rates
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.9082 <
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 14.9280 <
The Euro/South African Rand Exchange Rate is currently in the region of: 12.9292 <
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.0225 <
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 7.7416 <
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.5257<
(Correct as of 16:00 GMT)
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